Customer Success, done correctly, has the potential to impact your business in myriad positive ways; from customer retention to advocacy, and from account expansion to CAC Efficiency.

So when I got this question in the comments section of one of my churn rate posts and started to answer, it turned into a post all its own.

The question was: “How is it possible to keep churn rates under 3% when we have an average of 10-15% in failed payments from Stripe and PayPal? Or are failed payments not to be included in the total churn?”

There’s a lot going on in that question… and the answer is far from simple.

And while this post is about Credit Card failures – the lessons herein relate to any subscription company that takes credit card payments and for any SaaS company, whether they accept credit card payments or not.

At the core of this post is the notion that a failed payment doesn’t mean the customer has churned… yet. Let’s start from there.

Sometimes this “grandfathering” of customers happens because you’re explicit with those customers; “if you sign-up today you can lock this price in for as long as you’re a customer.”

Sometimes you’re less overt and this comes from testing prices, getting your pricing wrong and having to change it later, or going Freemium and deciding that’s a bad idea and having a large cohort of free customers.

No matter how you end up there, having a cohort of customers that are “grandfathered” into their price – that is, they are allowed to continue to use your product at the price they originally signed-up regardless of how that may differ from what they’d pay if they signed-up today – is certainly not uncommon.

Though, while not uncommon, grandfathered customers are often a source of frustration and management overhead and I want to explore a few ways we can upgrade those grandfathered customers in a way that’s a win for all parties.

If we’re honest, email lead capture is pretty much why we have a website. I mean, aside from making a sale the first time someone hits our site, the main goal of everything we do – especially content marketing – is to capture leads (or emails we assume are or will become qualified leads).

The problem is that not every email address is created equal, right? Aside from those that are anonymous or otherwise of poor value (catchall, role-based, etc.) and likely to get you in trouble if you email them, some folks like to hide behind GMail or Yahoo addresses rather than using their work/professional address.

This means that when someone sign-ups up for your mailing list, Free Trial, or Webinar with a GMail address, for instance, they might actually work for a big company, but you just don’t know it.

And what if multiple people give you their GMail address to get that ebook you’re offering as a sign-up “bribe,” but they all actually work for the same big company? That’s probably something you should know, right?[Read more…]

Generally, I like to avoid discounts because the way they’re done most of the time can will devalue your offering in the eyes of the customer.

And that’s because most of the time, discounts are a cop out. It’s just easier to lower the price than to do the work necessary to sell at full price (or even higher).

I can’t help you if you just want to lower your price whenever someone objects, but if you want to NOT do that, and are interested in using discounts to actually GROW your business, well, then here are my three rules for using discounts.

The two main concerns SaaS vendors looking to ramp customer acquisition have are 1) how do I get my product in front of my ideal customers and 2) how do I identify those ideal customers in the first place… the answer includes Customer Development.

For super-early SaaS startups, however, the second question is the main one… who am I going to sell to when I launch?

Just this week I did an online workshop – for SaaS vendors at any stage – specifically about identifying your Ideal Customer (join my mailing list to get notified of upcoming workshops) and we spent 3.5 hours going over everything that this process entails.

And a couple times a year I do an online workshop – again, for companies at all stages – focused specifically on getting your SaaS in front of your ideal customers (again, join the mailing list to find out when the next one is).

Clearly, there’s a lot to creating an Ideal Customer profile – I mean, we spent 3.5 hours just going over the process in my workshop – and there’s even more to actually using that profile to ensure you’re attracting the right customers into the top of your sales funnel.

But if you’re just starting out, it’s tricky. While it’s wise to do Customer Development ideally before you even create or modify your product for that new market, the reality is you don’t really even know who to talk to yet.

The core idea behind Customer Development – if you’re not familiar – is that it allows you to question and test the basic assumptions you have around your new business idea, rather than simply going forward solely on your gut and hope.

But as my friend Greg Pietruszynski from growbots said to me the other day… Customer Development is great, but you may have to talk to 50 companies before you even figure out which ones are worth targeting, and that can take a while!

But Greg has a faster way.

He has a method for pre-launch and super-early startups to quickly come up with a list of companies to do Customer Development with – what he calls his Customer Development Hack 2.0 – and he’s been kind enough to share it with us.

I have a couple of thoughts in the Afterword, but for now I’ll turn it over to Greg.

For SaaS vendors of any size and at any stage, email marketing – from newsletters to transactional messages – can be an amazing customer acquisition and retention tool.

Nothing has replaced, displaced, or outpaced email as a super-effective medium to engage your audience – from prospects to customers – and it doesn’t seem likely to happen anytime soon.

No matter what social platforms pop-up, stick around, or go away, two things have remained true:

It’s still better to own and control your list rather than relying on the social network to manage – and disable or disrupt on a whim – your ability to communicate with your customers

Social Networks themselves rely heavily on email for on-boarding, to drive initial engagement, and to get you back to their platform. LinkedIn, Twitter, Youtube… they all have one thing in common: email marketing works really well for them.

But the days of the “email blast” are long-gone (though some less-than-clueful folks still use this archaic term)… in 2014, it’s all about segmenting your audience/customers/prospects and leveraging actual user behavior to drive your email marketing.

Which is why companies taking email marketing to the next level – like Vero – are super-exciting to me.

In fact, I met Vero’s co-founder Chris Hexton almost exactly one year ago and we’ve been friends ever since.

He recently told me how they got a 450% increase in conversions with some rather simple changes to their email marketing program.

I asked just how simple those changes really were – after all, he’s not just running a SaaS business but it’s an email marketing platform; what’s easy for him may not be easy for others – and he said they were easy.

I said prove it… a super-long, uber-detailed blog post or it didn’t happen.

Well, it happened and below is the post with the proof and all the glorious details.

I’ve got a few things to add in the afterword, but for now I’ll turn it over to Chris…

I have a confession… Sixteen Ventures – the best little SaaS Growth consulting shop in all the land – is just me… and I have a time management problem!

I do everything… from writing blog posts to writing proposals and from interacting on Social Networks to Networking at Industry Events.

One day I’m working with a startup in Poland via GoToMeeting on accelerating early-stage growth, the next day I’m on a plane to Atlanta to help accelerate the growth of a struggling $10M/year SaaS company with major organizational issues.

All of that to say… I’ve been thinking a lot about “time” lately. I suffer from scarcity on several levels, but time scarcity is probably my biggest enemy… probably yours, too.

We all feel like we need to be busy all the time or we aren’t working… we aren’t hustling.

Yes, work and hustle are important, but not to the detriment of everything else… including the progress we claim to be “hustling” for.

As has been said a million times by a thousand experts, busy isn’t bad as long as what you’re busy doing is moving you forward (and even then you should take time to just think… to contemplate… to meditate).

But most of us spend far too much time on things that – while the outcome might move us forward – the doing of the things is actually a big waste of time… which is why outsourcing, Virtual Assistants, Fiverr, etc. are so popular right now.

And so is automation.

In fact, way back in mid-2013, I got an email asking if I’d heard of this cool new service called Buzzfork that helps you increase engagement – as well as followers – on Twitter… while you do other stuff.

I was intrigued since Twitter is where I spend most of my time when it comes to social networks and promoting my content (and business)… but I often feel like I spend too much time doing that… this was the answer!

As soon as I learned about Buzzfork, I also learned about – and met – Chris Bolman, the founder of the company.

Now, Chris and I have talked a lot about Growth Hacking, startups, etc., since then, but the thing that originally connected us was time.

So I asked Chris to put some thoughts together around Being Successful while effectively managing your Time – the only truly finite resource we have – and he was kind enough to do just that.

I’ll add a couple of thoughts in the Afterward, but for now, I’ll turn it over to Chris…

If your SaaS addresses a big- or specific-enough problem that people are willing to pay to solve, you can probably achieve enough growth to result in a decent-enough sized business… in spite of your efforts.

But you didn’t set out to build a “decent-enough” sized business, right?

Don’t you owe it to your shareholders and stakeholders to do more than simply exist?

Your investors and employees – not to mention their families, the charitable organizations they support, and the merchants in their communities – would like to see some type of return on the investment they put into building your company, right?

Well, to get there, you need to be deliberate in your growth… you need to grow because of your efforts, not in spite of them.

Unfortunately, that’s not how many of the SaaS companies I talk to operate…

Whether you’re pre-launch, post-Product / Market Fit (P/MF), or an expansion stage SaaS vendor, Growth Hacking – the methods, tactics, and especially the mindset behind it – can be leveraged by companies at all stages to accelerate growth.

Of course, the stage of your company dictate what growth you’re trying to hack achieve, the success metrics for those initiatives, and the methods or tactics you’ll use.

And while the Growth Hacking tactics a pre-launch startup would use – to build interest, get press, or generate market-validating revenue, for example – may differ from the tactics an expansion-stage SaaS firm focused on increasing Dollar Revenue Retention (DRR) would use, it is very helpful to learn about methods that work at all stages even if it doesn’t directly correlate to your current situation.

Which brings me to a conversation I had with Liam Gooding of Trak.io a couple of months back about Growth Hacking at very early-stage startups.

I’ll let Liam go into the details, but essentially, while Trak.io was in invite-only beta with a lengthy wait to get in, as a way to offset infrastructure costs and – frankly – to see if people were willing to pay for early access to Trak.io, Liam and his team implemented a “jump the queue” one-time fee.

And, well, it worked… and Liam was kind enough to share exactly what they did, the specific results, and the thinking behind this early-stage Growth Hack.

What Liam and his team did with Trak.io is applicable to SaaS companies in the earliest stages, of course, but I think the psychology and thinking that they used – and what goes into making Growth Hacking successful in general – apply across the board.

Don’t let the fact that Trak.io was in beta when they did this – and you’re not – keep you from paying attention to what he has to say… if you do, you’re only hurting yourself!

I’ll add a couple of thoughts to what Liam talks about – as well as share an awesome resource he is putting together for you – in the Afterword.

A recruiter looking for a Growth Hacker contacted me recently and my immediate reaction was “I wonder what that position was called two-months ago.”

That seemingly innocent LinkedIn message from a recruiter just trying to do their job, combined with the facts that any marketing tactic is now considered a “Growth Hack” and anyone with any involvement with Marketing – at any level and in any function – calls themselves a Growth Hacker – has made me question everything.

I originally liked the term Growth Hacking because I thought it most accurately defined what I do for my SaaS clients; I help them grow – rapidly and sustainably – by taking full advantage of the SaaS Business Model and unique distribution methods.

From in-app Conversion Optimization and Retention strategies, to viral expansion in the most staid B2B product categories, Growth Hacking finally encapsulated what I do.

But I didn’t gravitate to the term Growth Hacker on my own. In fact, it wasn’t until Bronson Taylor interviewed me for Growthhacker.tv that I realized this term fit. BTW, that was WAY back in July 2013.

In the months since, however, I feel like the term Growth Hacker has started to lose it’s meaning… that it’s been bastardized and co-opted by anyone and everyone.

Growth Hacking – the term – is now just linkbait people use to get traffic while they rehash the Hotmail and AirBnB “hacks” or talk about SEO or Copywriting or [any generic marketing tactic] and tag it #growthhacking.

Cut to the end of December 2013 and I’m lost.

I’m not usually one that needs definitions, rules, structure,… but I’m not concerned about me.

If Growth Hacking is to mean anything to anybody – and if true Growth Hackers are to stand out from the crowd – then I think it might be time for some parameters around the term.

Otherwise it’s nothing more than a nerdy term of self-endearment we stick in our Twitter bio like ninja or rock star. Who cares.

So once again, I turn to Bronson from Growthhacker.tv. My sage… my sherpa… my guiding light in this time of darkness.

I emailed Bronson, told him what’s going on in my mind and asked him to comment on the current state of the Growth Hacker movement… he said this was just the catalyst for his Growth Hacker Manifesto, and I’m excited for him to share it with us.

Whatever the scenario for the SaaS vendor – during a Free Trial, as a free user of a Freemium, for Demo requests or Enterprise Pricing Inquiries, or after a prospect becomes a paying customer, I get asked all the time what the best email follow-up sequence is.

While addressing the ideal follow-up email sequence may seem like low-level tactical drudgery for most SaaS leaders, there’s a higher-level mindset that must be driven from the top of the organization down that ultimately drives the correct tactics.

The mindset of Customer Success and properly aligning processes – including email follow-up – is critical to the success of a modern SaaS enterprise.

C-level executives must fully understand and embrace the SaaS business model and then instill in the organization that understanding as well as the mindset to fully exploit the potentials of the chosen model.

Quite often, tactical choices in the trenches are driven by strategic decisions at the top, and when you find an organization that isn’t Customer Success-focused and that doesn’t fully understand and embrace the SaaS business model, you end up with tactical execution that exposes those deep-seated strategic flaws.

So yeah, this post is about email follow-up… but just like everything I write, it’s about so much more than that!

This is a post about SaaS pricing models… but it starts with a story about human behavior.

We all know that money doesn’t buy happiness – it buys freedom, and it’s with that freedom that you can choose to do things that make you happy. Money is just the means.

But quite often, as people and companies start to get more money, they run into problems… their lives and businesses start to become more complicated creating a situation counter to their original goals.

In this post, we’ll explore how to use this idea of “Mo Money’, Mo’ Problems” (shout out to the Notorious One) to create a more effective – and profitable – SaaS pricing model.

Growth Hacking is all the rage right now. In-fact, anyone even slightly involved with marketing or product development in tech companies now calls themselves a Growth Hacker.

Now, once everyone identifies as a Growth Hacker the term will be meaningless… but what goes into Growth Hacking (or whatever it’s called in the future) will persist and in-fact, is transforming an industry right now.

I generally describe Growth Hacking as a mindset that revolves around leveraging your understanding of customer and user behavior, market dynamics, and what’s technically possible – or should be – and using your imagination to put it all together to drive growth.

But what does that really mean?

Well, that’s why I wanted to go deeper on that definition, if only for my own clarification, though I hope you find value in it as well…

The other day I received an email with a very specific SaaS marketing question: “we have the opportunity to send an offer to the email list of one of our Integration Partners… do you have any tips for us?”

Well, since having the opportunity to send an offer to a partner’s email list can be an awesome way to grow your business, I developed a very thoughtful response to the original emailer… and now I’m sharing that response with you.

When it comes to SaaS growth hacking, an email address is a powerful thing.

Updated for Q4 2014!

If you have a list of email addresses – house lists, scraped, or bought – you can do some “pre-targeting” to increase the likelihood of engagement (that they’ll open, read your email, and click a link) before you ever send them a message.

For example… think about the list of people that signed-up for your Free Trial but didn’t convert and how these tactics might help warm them back up before you send the “give us another try” email.

Doing these things before emailing your list will not guarantee success with your cold outreach email, but it will improve your chances by being a bit less cold.

Attention SaaS Providers: If you use email in any way to communicate with your users, customers, and prospects, you should care about GMail’s recent additions: Tabbed Inbox and Categories.

As a SaaS provider, you leverage email for marketing with things like your newsletters and your Free Trial follow-up sequence. But you also send transactional messages like activity reports, password reset notices, and dunning messages.

So yeah, even in 2013, email a major communications channel between you and your customers, users, and prospects.

And since GMail has roughly 450,000,000 users with 5,000,000 Google Apps for Business users, chances are – especially if you sell to the SMB market, startups, entrepreneurs, freelancers, oh, and governments and schools – a non-trivial portion of your audience is probably using GMail.

If you’ve seen your open and click-through rates go down recently, it could very well be due to these changes. If you haven’t experience that, consider that you might as Google rolls out Tabbed Inbox and Categories to their Business users.

So, again, if you use email for anything, since a large portion of your audience is likely using GMail… you should absolutely care about these recent changes, what they mean for the future, and how to work around and with them.